Making Sure Your Ads Aren’t Deceptive

Attorneys General from around the country have stepped up enforcement of state advertising laws. Many state advertising laws piggyback on the Federal Trade Commission’s (“FTC”) definition of what makes an advertisement deceptive, so understanding of what the FTC defines as deceptive is helpful.

According to the FTC, an advertisement is deceptive when a material representation, omission or practice is likely to mislead a consumer acting reasonably under the circumstances. Something is “material” when its inclusion or omission is likely to change the consumer’s decision or conduct regarding the product or service offered by a business.

There are several steps you can take to make sure your advertisements are not deceptive. The first starts with your disclaimer. You should look at your disclaimer as a tool to qualify your advertisement, not contradict it. Do not give the consumer the idea, for example, that you “will finance anyone” and then say “anyone” means a consumer that puts 90% down and has an 800+ credit score. Your disclaimer cannot undo the material representation you have made to a consumer. Instead, have your disclaimer qualify and complement the message in the advertisement by explaining specifics of the offer.

Another step that has become a best practice in our industry is the appointment of an “ad guru” to monitor your business’s advertising compliance. You should make the ad guru responsible for approving every advertisement and any changes to your website. You should limit the number of people who can override the ad guru’s decision and watch who you assign as the ad guru’s direct supervisor. Normally, the ad guru should report to someone higher than a sales manager unless you are comfortable with your sales manager handling what is in effect legal compliance. Make sure the ad guru has proper resources and training to perform his or her duties. Also, if you use a service to list inventory online, and this service includes generating descriptions and comments about your inventory, do not rely on the vendor to keep your listings and descriptions compliant with the law. Your ad guru should check these listings and their descriptions as closely as those in an advertisement published in a newspaper or on television.

We can help evaluate your advertisements if you would like a second opinion on whether an advertisement may be viewed by an Attorney General’s office or the FTC as deceptive. Call us at 631-224-7000.